now. up around 500 points just under we will show you what is moving. crypto is rebounding after bitcoin hit a low below $18,000. new over the weekend jetblue raising the offer to buy spirit air details straight ahead monday not monday feels like monday. it's tuesday, june 21st. a long, long day in terms of how long the light is there. 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe

kernen andrew is off today. let's look at the markets. this is a welcome relief last week was the worst week for the dow of 2020. you see green arrows dow futures indicated up 500 points right now up 487 s&p up 64 points nasdaq indicated up by over 200 points this morning. pretty significant moves coming after big declines last week if you look at the treasury market, you see the 10-year treasury is 3.275% yields up across the board you have the 30-year treasury at 3.42%. 2-year treasury at 3.213%. joe, it is not last week anymore. >> thursday and friday were okay in terms of stabilizing. >> dpow was still down.

nasdaq was up. >> the previous day was horrific day. that's what i'm talking about. really -- i don't know if it felt like a full capitulation. >> did you see the journal with a piece of wondering how far it is to the bottom s&p since 1950, the s&p sold off 15% on 17 occasions. 11 of 17 occasions, it took the fed to take over before it started easing we had a lot in the last two decades. >> i remember all 14 of the recessions and only 4 happened now, speaksupposedly we're at 4 economists forecasting recession. bad news is that number hit as

we are on the cusp of or already in recession >> lagging indicator >> when you get as high as 44, you are already there, supposedly for the stock market, if you need the fed to ease, they may do a couple more if things seriously slow down? >> it was at 110 i saw it above $110 a few minutes ago. that's the biggest thing the fed is trying to stop the higher energy costs. there is not a lot they can do except blunt force trauma. >> cancelling 5,000 flights is not good for the economy. >> how many people i was trying to figure out how many thousands of people got stranded this week >> was there weather >> always weather. >> there were some i did see down south i was getting emails about

flooding >> not unusual weather overall for the country. >> workers >> staffing levels >> do you like 18 cents a gallon >> that would be nice. gas tax? >> president biden is seriously considering a halt in the federal gas tax. officials say fourth of july is the target for announcing new messasures to push prieces lowe. tens of thousands will hit the road that hole iday he can make the decision by the end of the week. we will talk to cecilia rouse in the 8:00 hour. she worked for president obama when president obama said we will not do any gimmicks with the gas tax. do you really think giving people a free half a tank of gas

is going to make -- equating it to that. just not going to do it. that's a lot of clipped played over the weekend whether or not it makes sense to do it. president obama didn't think it was worth it called it a gimmick. according to aaa, the average price of the gallon of gasoline ticked below $5 a gallon crude prices, as we mentioned are not 130$130 back to $110 and they are down. up $2.60 to $110 we were below $110 checking crypto. bit pro shares plans to launch the first short etf for bitcoin.

the first to launch bitcoin futures etf. this short strategy will trade on the nyse under the ticker bite me. no biti >> biticent. >> yeah. no "m" there released yesterday you know what? markets and everything else -- what do you want we have to have a sense of humor. yesterday, michael sapio says as recent times shown bitcoin can drop in value. he said the new etfs gives investors profit from drops or hedge from the crypto holdings >> captain obvious. >> yeah. i did one of the winklevoss said

something. you wonder winklevi, the firm, and novagrad, you wonder how they're sleeping he said -- cameron okay, bitcoin under 20k. feels like an overrotation the underlining fundamentals, the adoption and infrastructure have never been stronger we saw the irrational top. this feels irrational in the other direction. >> he said it was irrational top at the time? >> i don't know. 65 the bitcoin bulls are still saying $100,000 within a year or two. we heard katie stockton on the show before us, 18,500, that will be broken, according to her.

>> if that is the case, 13,900 >> that is at risk she said other things about -- she is not happy about anything in the stock market as well. they're linked >> they are linked for a while, we thought the stock market wagging the bitcoin dog. i wonder if that is still the case bitcoin holding and coming back above 20,000 today and the futures up sharply no reason to point to any of it. they are linked, obviously. >> it looks like the brief counter trend bounce that katie was saying so far it is going exactly according to what she told us and that plan. i felt bad on thursday the vix with the high of 34. nowhere near 40. joe mentioned the debate of the u.s. recession growing more intense this morning with comments from the white house

aiming to tamp down fears of the economic downturn. here is janet yellen speaking on abc's "this week." >> i expect the economy to slow. it's been growing at a rapid rate it's natural now we expect to transition to steady and stable growth i don't think recession is at all inevitable >> yellen's rhetoric matching what president biden told reporters yesterday. he recently spoke with former treasury secretary larry summers and confident recession is a avoidable pending lowering medicare costs what summers is telling the president is contrast to what he is saying publicly he thinks the fed did not help with the projections and rhetoric he said we are still headed for a hard landing in the speech in london yesterday, summers said i fear

we will have both elements of secular stagflation and secular stagnation numbers in his words are discouraging relative to the federal reserve view goldman sachs is boosting its odds of recession to 30% over the next year versus the previous 15% in a note to clients this morning, the bank said it is compelled to respond forcefully to high inflation expectations if energy prices rise further. even if economic activity slows sharply. and nomura said a recession in the fourth quarter is likely than not citing tightening financial conditions and sentiment shocks and energy and

food dsupply disruption. and lennar with the shares estimate just in revenue also topping the wall street forecast. and it had new orders increasing from 4% from a year ago. the dollar value jumped 20%. the stock up less than 1%. we heard of the home starts coming down. >> if the economy falls off the cliff, the fed will not go as far as we think. i'm grasping at straws i don't know the systemic system wide inflation that will last for years and years. i don't know supply chain it is supply chain related to the reopening and pandemic >> and it is strong demand

very strong demand. >> that can go away so fast. >> right by the way, this is a global issue. not just the united states all central banks tries to raise rates and suck in liquidity it poured out during the pandemic >> unless you believe in the m2 story that the fed went crazy and there's too much sloshing around we are paying the piper at this point. you wonder how much we have to pay the piper. i don't know how many months or years we're talking about. i'm hopeful. remember where we had to go to slow things in the '70s? we're talking 4%, not 12%. >> the economy doesn't stop on a dime if you have global pressures pushing at same time, the ship can turn faster. when we talk about, we will talk technicals with chris v

verrone. as we head to break, let's look at what is moving in the markets. the pre-market winners and losers in the s&p 500. marathon oil up at the top of the list prologis royal caribbean and schlumberger and on the downside. ip it is down 2% right now. we will continue to talk about this and much more when we come back you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by truist securities

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to where it was. if you look at that from the s&p le levels, you are talking about the 3400 range one thing i want to distinguish here i think we have to distinguish between over sold bounce and capitulated low. there is a good move for bounce. we are right up there with the worst two weeks in history right up with '08 and covid. those lows had very, very clear capitulation signals i don't think we have that here yet. >> you mean capitulation >> we haven't seen -- this is fairly orderly joe said this morning, we have not seen bips above 40 call ratios have not spiked. i think there is still something missing here in terms of checking the boxes of what a

goodhistorically >> you are saying 3350 to 3400 i thought your target was 3500 things are so much worse that you brought your target down >> put your thumb somewhere around 3500 on the s&p chart it gets back to the zone of where you were pre-covid we know a single level is too precise for aninprecise business we work in apple, pre-covid, about $100 microsoft, pre-covid, $220 the big generals still have a way to go before you are talking about the late 2019 or early 2020 level. >> we could see a bounce here, you are saying don't be sucked in there is more pressure to come >> yeah, in these bear markets,

you get seductive rallies. our work has shown historically the bear market rally is a two-month event. roughly 15% off lows that gets you back to about 4,000 or 4,100 on s&p. we were there on june 8th. the bear market rallies can be seductive. it is more resistance on top of us 3350 to 3400 zones if you look at the macro broader pic picture, if a bounce is going to turn into something real, that has to change. we have new highs in german 10-year treasury yields. japanese yen back to 135 the things i look to change is the macro inputs which have not changed. >> what would potentially change your view? oil prices soared at $110 this morning back off the highs i think that is the fear of

recession which more economists are now calling for. is that the type of thing if there is recession and if the fed says we will not raise as quickly and is that enough to change the macro picture in your estimate or is it too late >> i think we will let the market be the judge of that. what we say in our work is number one leadership is the avenue for what that change would evidence itself we have not seen a big shift there. i recognize the basic materials and energy have come off the last couple weeks. by and large, it has been there this entire time discretionary has been there when you look at bounces what turns a bounce into a durable advance? the signal where you get unmistakable momentum. the percent of stocks on any given day with the 2% daily advance. i want the lows with 50% of the

market giving you the screaming momentum signal. we have not zseen one of those days look for a momentum off the low and change in leadership >> you say the one place you would buy weakness is the energy market >> yeah. i think in the drawdown phases and bear markets, ultimately nothing is immune to weakness. remember, energy is correcting with the back drop of good trends 90% of the stocks in the sector are in an uptrend here i'm more willing to buy weakness in groups with good underlining trends i would emphasize, despite the weakness in the last two weeks, there has been no weakness in the underlining credits. that's a big distinction over the last ten years anytime energy stocks weakened, credit has weakened.

that's not the case here it is not energy here. >> chris, thank you. by the way, if you see changes in the macro, call us, okay? >> you got it. coming up, we'll talk about the union push at apple stores retail as one maryland store voted in favor of unionizing over the weekend. still to come, morgan stanley strategist mike wilson win talk about the rally look at that picture what does it mean for the next -- maybe we get a little bit of bounce? >> two months. he says stance i3950 to 4100 break off the ttboom >> "squawk box" will be right back ntegrate ons all in one place.

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workers at a maryland apple store voted to unionize. the first of 270 stores in the u.s. to do so. the employees at the towson location voted 2 to 1 to make the move union leaders say over two dozen stores express interest in unionizing we're watching shares of twitter this morning in the s.e.c. filing, the twitter board recommending that shareholders vote in favor of the elon musk $54.20 takeover bid. musk making comments overnight in doha forum saying there are

unresolved matters in the twitter board. he would focus on driving the product of twitter the stock up 3.8% right now. still far below the $54.20 bid mondolez will buy clif bar for $2.9 billion they make lulu bars and clif bars mondolez will add the brand to the oreo brand of products >> have you had them >> they taste like mud >> i lived off them for a time >> i had them in davos i had peanut butter ones

>> chocolate chip. >> it has a weird texture. >> a little. hey, protein that's how you get it. when we come back, we will talk about the moves in oil and gas over the weekend and look at the moves from the energy companies wti up 2.25% energy companies leading higher today. marathon up 4.7% the best in the s&p. exxon is up 3.5% chevron and occidental and schlumberger all up throughout the month of june, we are celebrating pride month. here is the mastercard representative >> the biggest influence on me growing up as indian american woman in a small southern town is the leader we lost this year to cancer.

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-hi, i'm smokey bear and i made an assistant to help you out. because only you can prevent wildfires. -hey assistant smokey bear, call me papa bear because i'm "grrr-illing" up dinner. haha, do you get it? -yes. good job.

-so, what should i do with all of these coals? -don't just toss them out. put them in a metal container because those embers can start a wildfire. -i understand, the stakes are high. assistant smokey vo: ha-ha, ha-ha. -see, smokey think's im funny! good morning welcome back to "squawk box" live from the new york stock exchange becky is doing research on camera >> i was doing research. >> she is very focused futures are up 513 points. fat finger what is that oil prices -- it said -- well -- did you see it said you? >> yeah.

>> you were looking down >> i didn't realize we were back >> a comedy of errors. you want to do it? >> good morning. welcome back to "squawk box. i think they have the idea we are live from the nasdaq market site in times square. good morning, everybody. >> my story. i was covering for you >> you didn't know either. >> oil prices -- futures are up. i wouldn't fall in love with that maybe we'll have an update futures are energy are interesting. what was interesting is we were below $110 let's talk to amrita sen number one, it did, amrita, come down soutwiftly from over $120. now it is up today these are all moves that are difficult on a dpaily kbasis to try to figure out what is going

on what is the current situation with supply and demand maybe there is demand concerns with the fed getting in here actively >> yeah, that's what it is the concerns with changes on the ground we have not seen anything yet. anything with the preliminary numbers in asia or europe. strong numbers on diesel and gas demands. remains strong jet fuel demand. the demand can be satiated we s have so many flight cancellations due to labor the market is scared of recession given fed hikes and the fed hiked by more than what it guided to the kind of thinking is that fed will have to get interest rates to levels that are so high that

we have to go into recession in order to control inflation that is very much what guided that move down on friday which was a clear sign there wasn't a lot of liquidity in the market we are factoring a mild recession the second half of next year. we shouldn't under estimate china's impact the issue with the feedback on inn fflation is the supply chai because china is still shutdown. once the factories reopen, thos issues will ease despite food costs. i'm not saying that's a big deal, but depth of recession isn't as acute if china reopens. >> china has a different dynamic with covid

things here with more written today and cases are up deaths are sharply lower it is almost in the rearv-view mi mirror will that play out in china? give it another couple months and they will be back to some type of normal for supply chain issues >> i don't think it will be that soon because china is still sticking to the zero covid policy they call it the dynamic zero covid policy they are doing more testing and allowing workers to go back to factories regionally it will take months and well into next year we understand xi jinping is under pressure to open up. given the world almost now treating covid as if it is endemic except china they have the 20th party

congress in october. that is an important event to follow if there were changes in the covid policy, that is when it will be announced. i'm not expecting international prices any time soon domestic reopening will help with the inflation issues in the west >> amrita, i know this is not our field of expertise we spoken with dr. scott gottlieb he said we will see the rolling shutdowns again because they haven't done enough to get their population ready for the opening. they haven't done things like taken some of the western vaccinations or make sure elderly population is vaccinated if you are not doing those things, you could face a big problem because they have not seen the natural immunity other places have gotten because so many of the population has gotten it and has gotten through it it will be different for them to

open up. >> oh, absolutely. we have seen the vaccination rates in the 60% it is the 80% with the vaccines. they are developing an mrna are pfizer it will be a chinese brand which will go to market soon it will take a year to get fully vaccinated for everybody it boils back down to death rates. the chinese government shifted focus as well. it was about case counts earlier. now, over time, the media can pivot to death kocounts that will make it easier to reopen i don't expect flights to go into china, but localized reopening is absolutely possible that is what i are seeing in shanghai right now it doesn't mean we will get 48 hour mass testing. i think the government is under

a lot of pressure to do something to normalize things there. >> what could we be missing on the supply side? what wild cards are there? what could really increase if prices are high enough where everybody should put rigs to work and everything else it is happening in the country what will result from whatever o overtures we're making to saudi arabia is there any way to see a big supply boost or is that static for the next six months? >> i think a couple of things. even in the u.s., regardless of pr prices, yes, they are going up a little bit the big usissue is labor we cannot find any producer saying steel or raw material labor is available that is a big issue to grow in the west in terms of saudi arabia, the

saudis have slowly increased production saudis are looking at the market differently from the short-term prope producers. balances will be a lot tighter if china opens up next year. why bring this to the market right now when it does need to keep the powder dry for when you might need it more it is trying to balance that it is a difficult thing they are trying to achieve. so far, prices are high. it could have been higher. they are trying to smooth out spikes they will keep bringing production back, but it will not be a flood of oil to the market. outside of saudi arabia, uae and gcc as a whole, capacity is a strain declining production is the biggest challenge for the oil market lack of investment >> you actually think all of the flight cancellations eases the

demand a little for jet fuel a real factor in determining prices >> yes, look, we are about to publish something saying we are cutting 100,000 barrels a day across europe and north america because of this. it doesn't change because the supply issue is so great. people still want to go on holiday this summer. if they can't get on a flight, they will take to the roads. you may see gas demand in europe stronger it may not change much, but jej jet alone, it helps get the supply demand in balance >> amrita sen, you are back in london >> back in london. >> good for you. that's good. >> it did get canceled

i had to take a different flight back yes, it did. >> it did. there you go thank you. >> that does not make her unique >> no. when we come back, shares of spirit air are higher after jetblue raised the offer over the weekend. details on that next. later, we will talk to council of economic adviser chair cecilia rouse about the state of the economy and much more "squawk box" will be right back. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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welcome back here is something to wake up to. dow futures indicated up 500 points s&p futures indicated up 56. nasdaq indicated up 213. a break from the red arrows last week breaking over the holiday weekend. jetblue raising the offer to $33.50 a share for spirit airlines as it works to try to convince the carrier to accept the over rival frontier airlines

jetblue said the latest offer is significantly increasing the diff divestures to get approval spirit received the revised propos proposal spirit is up 2.72%. and five flights over the weekend. 5 thundershowers canceled or de 5,000 canceled on saturday alone, 6,300 flights delayed and 850 canceled flight aware said delta was the worst hit. pete buttigieg said they would talk about improving operations. >> make it better. >> i know. and then 5,000 flights canceled.

the secretary's flight from d.c. was among those canceled on friday. >> what happened did they book too many flights >> what if the pilots don't show up >> labor issues where pilots are not showing up because i know in one case, pilots working without a contract for more than a year. they are getting into the issues pilots have the upper hand >> i want everyone there all of the mainmaintenance >> they can't take off without full staffing. >> flight attendants. >> maintenance workers the whole thing. and they're in a bad position because so many pilots, not only short staffed, but pilots had to retire because of the mandatory retirement age not great. when we come back, tech stocks in turmoil. nasdaq down 31% year to date we will talk about the potential opportunities ghafr isrit teth

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beaten up tech stocks staging a brief rally at the end of last week, but still shy of the highs. join us, daniel newman and one of the stocks you like is microsoft it down 29% from its previous high, but we just had a technical analyst saying he thinks a lot of these stocks, including microsoft, have a lot further to fall, because if you look at where they were pre-pandemic it rose significantly. what gives you a different opinion on the stock.

>> we saw sentiment when things were falling they'll never stop falling there's a little bit of the sentiment that still remains, but we have a lot of headwinds ahead of us. the overall success of microsoft has been astounding, and growth in all the right areas i'm looking at a lot of seculars, becky, security, ai, cloud, and the growth in all those air jareas has been 4, 50. the company is just doing everything right and it's done everything right so the pull backs, i think sentiment based and i think there's a strong road ahead for the company. >> is that your same thesis with nvidia, that the company's doing very well and there's no reason for the pullback >> there's some of that.

if you look at ai and the second being metaverse, nvidia has some of the strongest product services in those areas. their growth, revenues you've seen their business sector growing at 80-plus percent. so the business hasn't really shown any weakness yet you've hurt a little bit but you got to look at how these businesses are performing and what's being pulled because of sentiment and because of these companies don't have it and maybe they grew because of the beta that went on because of the pandemic and everybody looked like a genius and every company looked strong. >> you're talking about some of the highest flyers nvidia went from $65, $67 before the pandemic there was huge run-up and a

market that was valuing things very differently we're talking about markets getting chopped. that's why people have questions about whether it's actual ly a good time to jump in or not. >> like everything, you have to watch. but the guidance is mostly in these companies. i also talked about qualcomm has remained strong. margin expansion, winning in categories if you look at a category like ai, this isn't going to slow anytime. the market as a whole for these particular product categories, we're not going to see any slowdown in the demand for 5g over the next several quarters you have to tie to all those things >> nvidia's still trading at a ratio of better than 42. what's a fair pe ratio if you think you should buy here? >> i think that's about right.

i still think the pe's a little high so some of those, people are saying, yes, it certainly could come down, but there is that falling-knife sentiment. when it was trading in the 3 hundreds in objectober, i would tune into the show, and a lot of people were saying r rah, rah, keep going we are seeing them in markets that are going to grow exponentially with big category growths. i think you're at a point where could you start to look at these names. but over the long run, if you look at the performance here, i think you're going to do very well and most people are trying to look at investments on that longer run versus more after trade. >> daniel, thanks. daniel newman. coming up, futures pointing to a rebound for stocks.

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good morning we're looking for a rebound. investors try to pick up the pieces after wall street's worst week in two years. we'll find out if stocks could be poised for a bounce and president biden is seriously considering a halt to the gas tax. we will take a deep dive into the energy sector as the second hour of "squawk box" starts right now. good morning welcome back to "squawk box. this is cnbc we're live from the nasdaq market site in times square.

andrew so andrew is off today. the dow is indicated up by 485 points the s&p is up by 64. the nasdaq up by 207 we've been watching the ten-year note, this comes after a bad week, the worst we've seen since ob october of 2020 for the dow. oil prices, though, have been down i think we're going to look at bitcoin first. oil prices have been down but are coming back up, by about $2 this morning to $110 however, if are you looking at whatever the next chart might be you're going to see gasoline prices? rbob suppun 3.4% the national average price for a gallon of gasoline ticked back below $5 to $4.97 a gallon over

the holiday weekend. a little bit of relief crypto prices are back up this morning above 20,000 maybe above 21,000 last we checked. breaking news from kellogg sara sara eisen joins us with the detail >> kellogg is breaking up. more than 100-year-old consumer giant is set to become three public companies the main company will be comprised mostly of snacks and the international cereal business, popular brands like cheez-its, eggo waffles, pop-tarts. also has so. crown jewels, like pringles. often kellogg doesn't get credit for these brands

now u.s. cereal will become a separate entity. it will include cornflakes, rice crispies, raisin bran, $2.4 billion in sales. and a third company is going to be created, a pure-play, plant-based food company, including morningstar farms. it will be a much smaller company. it essentially puts all three of these companies into play as acquisition targets. kellogg itself has been the target of takeover speculation over the last decade or some of but it's been a tale of two businesses, the faster-growing snack business and slower cereal business they're going to move the headquarters of the global snack company to chicago from michigan the other two companies will remain in battle creek, michigan nobody at the company will actually to relocate, because chicago's already been a big center, and there are no

anticipated layoffs as a result of this split. the ceo will still be the ceo of the global snack companies and the ceos of the other companies are tbd. don't know if they will even keep the kellogg name. the timing of this announcement, guys, guys, is pretty interesting. i'm told it's about taking the growth of the business to the next level and kellogg really wanted to do it from a stature of strength. consumer packaged goods companies have had trouble growing and adapting and meeting younger consumers' needs the last big food deal of this time, remember, was when kraft split into two that was october 2012. few years later, warren buffett

merged with heinz. other companies have been breaking up. we know how trendy it is johnson & johnson, ge, ibm kellogg goes from one company to three. we've got an exclusive interview with kellogg ceo to talk about why, why now and what the future of these three companies look like, back to you. >> a little bitter sweet k-e double l, double good? the kellogg name could be gone for good it worries me that they're going to come up with names that aren't used. what the hell is mondelez? it could be three of those >> i'm told it will not be as bad as mondelez, which is sort of a joke. there is wide recognition that they got bad consulting advice on that one.

even the investor in mondelez trashed the name it stuck they kept it >> it sucked oh, it stuck, okay misunderstood. >> no, no, no. it's still there but i think they want to do better and also i will say on kellogg's, it's not daftefinite that they'll get rid of it >> those sugary cereals are a tough sell in today's world. i still love'em. >> i do, too >> and that's where pringles ended up that was a p&g unit. i forgot where pringles had toout actually ended are they getting into the cauliflower kale snacks? if you're not willing to throw

caution to the wind with salty corn snacks. >> tough from a health perspective? >> tough from fitting in with what's acceptable in today's world. corn and potato chips are not really -- >> the other ones are tough from the taste. >> the other ones are tough from the taste and digestive. >> i know you're still stuck on the cauliflower trend. i think it was a little fleeting it's not the biggest trend anymore when it comes to potato chips, but what we've seen from pepsi and mondelez, they still want the salty snacks. they still want the stuff that's not great for you. they indulge in it it may not be very much on trend with sort of the smaller innovative companies are going, but there's still huge demand for these brands, and pringles in particular has been growing double digits.

>> who would be a protection buyer of any of these companies? and that's why the timing's a little weird, too. because if you're heading into a potential recession. monetary policy's tightening, tricky time to take on a big deal or is that kind of the point, that nobody could buy kellogg's all together but maybe could you buy a smaller part of it >> i think buying a smaller part of it is the idea. ma maund lez just bought clif there's always talk that maybe coca-cola could do a deal. they' they've been a total beverage company, but there's always speculation that they'll get into the snack business to compete with pepsi pe

pepsico itself could buy it. all these companies. uni lever, there was a failed deal three years ago it will be interesting to see what they do that has a big food component as well there's speculation that could break up and maybe you could pair some of these food companies together and then there's this new sort of smaller plant-based company have to wonder if that will go to one of the companies that had missed the boat on beyond meat or impossible foods, because now they have this sort of fake meat in the morningstar brand that may be the easiest. only 300 million or so in sales. >> lots happening, a lot to talk about there. >> yeah. >> woke-a-cola. i thought they changed it.

still coca-cola >> i had a topo-chico and i loved it it's so fizzy. >> it's hard to get now. >> it is >> stock up. we can't get it if at whole foods in manhattan, which is a big bummer for my husband who's obsessed with it >> and you live in manhattan why? >> because it's the greatest city in the world. and you live in new jersjersey,? >> a lot of reasons. there's trees. co i could go on. >> you don't see people carrying atms go by while you're walking down the street. coming up, airline stocks have been ground is this the time to buy or an

indication that a recession is on the way as we head to break. lennar data out. the company says that it began to see the negative impact of rising interest rates as well as certain home prices toward the end of the quarter ua miller will join sq"squawk on the street" at 6:00 eastern time

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comcast business. powering possibilities. the debate over a coming u.s. recession growing more intense this morning with comments over the weekend from the white house apriliming to t down concern janet yellen speaking this week. >> i expect the economy to grow. it's been growing at a rapid rate we expect a transition to stable and steady growth. but i don't think a recession is at all inevitable. >> our next guest has been sounding the bearish alarm for some time now, and he sees the s&p afc this morning with a new note falling, perhaps, to a level of 3,000 joining us sniek wilson, chief

investment officer, the way i read what you're saying, mike, is not that you're forecasting 3,000, but that you're saying right now the selloff has put multiples down to a more reasonable level but does not factor in a recession. and if we did have a recession, then we'd get another 15% to 20% down so we either get a recession or the risk of recession is extinguished what are the chances that we get a recession and go down foanoth 15% to 20% is it 100%? >> that's the question we are getting, is a recession priced and number two, what does a recession look like for the broader market we think the odds are 50/50 now. it increased materially since the beginning of the year for

numerous reasons, we don't have to go through all those now. but it incorporates the lower multiples, which was the main call for this year, with earnings going down about 20%. so we're close to 200. we're not priced for that if that's outcome the issue, i think, is that the market can't really look forward until it knows the answer. i don't know the answer, you don't noknow the answer, nobody knows the answer until we get there. i'd like to say bear markets end with a recession as soon as a recession is obvious, that's the time you really want to step in of course we could still avoid it we could still have a soft landing, we're not saying that's impossible the best case is that we don't have a recession this year, but next year. we won't know the answer for at least three or four months is my

guess. >> it depends on inflation, i guess, too because we don't know where the fed, necessarily, will stop at this point i think all bets are off, really you know, we just had a great energy analyst on talking about a ceasing of lockdowns in china could free up supply chain issues and take the sting out of recession. and higher prices at some point are going to do the work for the fed, won't it? maybe the fed doesn't need to go as far if the fed ever indicated that it was ratcheting down its terminal endpoint, i think that would be bullish, wouldn't it? >> well, we could get into that right now. our view, we talked about this the last couple months look, i think the fed's already

gone far enough with its jawboning, made the bond market always does the fed's work for it by pricing in the number of rate hikes that they're planning on so they've been very aggressive with their guidance. as a result, the terminal rate is 4%. i would be very surprised if we get to 4%. because look, it's already having enormous impact on the housing part, which is the single-most important driver of the u.s. economy the housing market is really coming to a screeching amount. one of the largest home builders isn't even providing guidance now. prices have come down, people's expectations are more realist partrealistic except for earnings groecht fien a recession is avoided, the earnings numbers are too high bought inflation number on cost is squeezing margins our fire and ice narrative is playing out to a tee

and we've priced a lot of it we just haven't brpriced it ful for a recessionary outcome you've got to be careful on your entry points here. >> right, but the difference between 4,000 and 3,000 is material >> that's right. so that's your risk-reward framework. exactly. so i wouldn't be surprised if we rally. we're still oversold our view is more consensus now people are really bearish. some people are more bearish than we are. we priced a lot, and we can rally, but you should understand that as you rally, the risk-reward gets worse, not better >> so in a nutshell, then, i think i understand at 50/50 re; wcession, which wod bring us to 3,000. with inflation where it is, earnings estimates need to come down anyway because profit margin

you're not necessarily saying that we're going to 3,000. but you certainly aren't feeling like any rally here is much more than a count areer trend in a longer-term market it's something that's headed lower at some point. >> yeah, or we're going nowhere for a while. that doesn't mean you can't make money. we've done pretty well in being defensi defensively positioned there's been places to make money, it's just hard. we're not telling people to abandoned stocks we're just saying it's not going to be easy there's no big rush n in 2020, there was a rush. we'll get through this, though it's a cyclical thing. >> what, in terms of the fed and in terms of inflation, other

than the housing market, that was interesting what you said. that's biggest thing for you at this point what else after housing? >> the biggest thing, i think that we have to find out is, is there more labor out there right? so probably the single biggest disappointment for the fed and economists is that the labor participation rate has been very sticky on the down side. and as far as i can tell, you can't grow without labor if that labor participation rat picks up, that would be really bullish for extending the life of the cycle and the odds of a soft soft landing being achieved. but it just hasn't happened. people were displaced from the pandemic people impaired by the pandemic itself, whether from a health reason or other, you know, taking care of loved ones. so there's a lot the labor market has been impaired i think it can repair itself

you know, over the next six to 12, 24 months, but if we don't see it repair itself and see labor participation rate, then i think a recession's inevitable >> the case for a secular bull, is there one >> yeah, that's our case we continue to be in the secular bull case. we've used this analog for the 1940s. we don't think it's the 1970s. it's more of a boom-bust environment. we had spike in inflation post world war ii, just like expost pandemic and we think that what people need to understand is that we're not going to have these elongated cycles anymore these eight-to-ten-year cycles they're going to be three-to-four-year cycles. that's not necessarily a bad outcome. people forget that recessions are cleansing events and can be

helpful in getting resources allocated properly i don't think anybody can argue that resources were misallocated during the pandemic. that's why you almost need a recession to reallocate those thirngs and it doesn't have to be the end of the world. we would be encouraged by that if it was shallow, which is what we would expect if we got one. that's what would lead to the next boom. if you understand that the regime has changed and the dynamics have changed in the u.s. economy, you can navigate this pretty well it doesn't mean that it's easy, but there's a positive call here for the secular case to still be in tact. >> okay, okay, excellent if you've got time, even here, 3,0004, to 4,000, i don't know. but mike wilson, thank u you. and you're welcome that we keep having that picture of you i think it was senior year of

college. can we update it or do you like that? you just refuse to send us a more recent one? >> it's good to be ageless, joe. you understand that. >> now you're talking. thank you. that was a grak answer it is great. see you later. up next, we're going to board the airline sector and have our flight canceled no, hopefully not. and find outif you should be adding positions to your portfolio. and at 7:30, breaking news from kellogg in the last few minutes. the ceo will join us right here on "squawk box." that's a big move for llg.keog a very well-known brand name i'm not sure you should get rid of it, steve we'll be right back. we got iphone 13s, too. switched to verizon two minutes ago. (mom brown) ours were busted and we still got a shiny new one. (boy brown) check it out! (dad allen) so, wait. everybody gets the same great deal?

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or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world. today is officially the first day of summer. that means consumers are taking long overdue vacations thousands of flight yess were canceled this past weekend would you think this would be the best of times.

what issues does the airline industry face and where do you come down on these stocks as a result >> absolutely, good morning. and thank you for having me. i think it's sort of a strange combination of events going on first of all, when you look at the industry today versus where we were in 2019, you have 15% less capacity. we went through the worst economic crisis, the worst depend shot in the sector's history. and part of the result of that was a lot of pilots retiring, for example, and now we have on top of that the demand has come back much more quickly than most people anticipated so when we look at the u.s. big three, you know, we'regoing to have positive margins m in the second quarter delta airlines should be in the low teens. i think very few people would have said that a year ago.

when we think about these staffing problems you also have broader infrastructure issues. perhaps on the traffic control side but it's a matter of the airlines now trying to reduce their capacities and to have a reasonable amount of capacity and certainty built in to their schedule so they can hopefully avoid, you know, the worst of what happened last summer, for example. >> steve, to they run the risk of having customers who are so angry that they just choose to not fly? i've got my summer plans booked for a couple trips, but i'm not eager to line up any newtrips, and i am very worried about the trips i do have planned with cancellation or delays or not being able to get to places. 5,000 flights canceled over the past weekend, that's tens of thousands of people that are affected

at what point does this come back to bite them in the butt? >> there are people who are upset about this and maybe will think twice about traveling again. but when we look at the overall numbers and demand in the system, you have for the second quarter for example and even going into july, passenger revenue in the u.s. is above where it was in 2019 so the revenue's already back. when we think about the flight cancellations for this weekend, i would say to some degree, the public is not entirely used to that, bu maybe wouldn't come as a 100% surprise are we going to have thunderstorms in florida sometime this summer i would imagine the answer's yes. do we have extreme, very high heat conditions that are going to limit aircraft takeoff rates in some places like the certidesert southwest?

i think the answer to that is yes. while you will have undoutdly elements of the public that will be put off by this, flight cancellations this weekend were a fathirly small percentage of e system a lot of people did get to their destinations >> it just feels like there a lot more cancellations than ever before would you agree? >> certainly is hard to state. you have a confluence of events with a long weekend. in fact, this is the first time the u.s. is celebrating this particular long weekend. and on top of that, you have weather events and the carriers in question that have really, i think, made a strong effort to have equipment and crew in place where they're needed, you know, is this past weekend been something extreme? i wouldn't necessarily say that.

we had a bunch of problems last summer that really made a lot of headlines, so i'm not sure i would characterize this as extraordinary. >> i don't know. the last couple summers, not every flight got canceled, as you said still to come. tom farley will be our guest to dig through all of today's headlines. don't miss our interview with cecilia rouse. stay tuned "squawk box" will be right back.

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vo: music can help you express how you're feeling. when you can't find the language, find the lyrics. brakeaking news from kellogg earlier this hour with plans to break into three companies sara eisen joins us. >> joining me now, an exclusive interview with kellogg ceo i think the first we is why now are you deciding to go forward with breaking up the company >> thanks, sara, thanks for having me. right now, i think, is the opportune time to do this. we coming from a position of

great strength and real momentum we had completely turned the business around from a top line and bottom line pernspective, an we see the next step in unleash being our potential with three companies. cereal co, allowing the management to focus 100% on the cereal turn around and global snarkin snacking company which has a portfolio of absolute superstars we believe splitting s them section actually the right thing to do. >> the kellogg name. joe kernen was getting a little sentimental. i know you have deep roots the company's founder. is that going to go away in. >> absolutely not, sara. the kellogg tradition has been around for 116 years now mr. kellogg started this great

company. of course he didn't know what pringles was, but he started the cereal business and his name will live on, on cereal boxes worldwide and i wouldn't dismiss the possibility of the kellogg corporate name but the kellogg philanthropic values will live on in all three companies. so he'll have three companies rather than one company. >> let's talk about the growth businesses and how investors should be look at this the snack business that you are going to lead that has the crown jewels like the pringles or cheez-its. what will this allow to you do what's the plan? >> it's an over $11 billion business that will be the global snacking company great gems if you think about pringles, it's a worldwide brand but think about cheez-it

pop-tarts, rice crispy treats. they've done extremely well. the international expansion opportunities are absolutely great. the ability to focus on just those brands and mostly the sna snacking space is a tremendous opportunity. it's a very growth-y company >> it's going to look a lot like mondelez which did a $3 billion deal over the weekend. i'm curious about how you think about m&a. is that something we're going to see from your global snacking company? >> it's absolutely something that we're going to focus on organic opportunities are extremely good the international expansion of some of these brands, a great opportunity for us but we will absolutely be hunting forred adding to the portfolio if it adds sheareholde

value. >> you have three acquisition targets. is that part of the thinking here what does consolidation in this industry look like to you? >> when we made the announcement, we said we would look at strategic alternatives, which means something other than going all the way to spin. there's an opportunity to think about that on the other two companies, i think the value creation opportunity as independent companies is extremely good. i mean, extremely good and i think both companies will value their independence and value the opportunities in front of them. so any kind of acquisition would have to overcome that, and i think that's a very, very high bar. >> cereal is the more tricky one. what is the future of that, it's been in secular decline for years. young people just don't want cereal you've got the union issues as we saw which created a lot of problems for you in the past

year what is the future of that company? >> i think the future is very bright, sara cereal has been around for over 100 years and has had its ups and downs for sure it's a pretty stable business. somewhat declining, but i think when you have a kellogg company that is 100% focussed on cereal and just its cereal brands doesn't have to compete with pringles or cheez-its, i think you'll see greater innovation, more brand building, bright days ahead of it. because again, you're going to have a management team that is here today that is extremely talented, very dedicated, and they're going have all their resources and resourced allocation and balance sheet and everything wholly independent, and they're going to wake up every day thinking about how to win in cereal and go to bed thinking how am i going to win

tomorrow in cereal >> general mills has a lot of the other big brands, post has some but all of those have other portfolio companies. it's an interesting experiment, and there's no leadership announced. mo no ceo announced for these other two companies. >> not as of yet a board directors will be making a dee scision and we hope to hae an announcement by the first quarter of next year >> what does their tell us about the environment we're in, how strong the food consumer is? because there's a lot of concern now about recession and a slowdown and very high food inflation. >> it's a tough environment to be sure. and it has been for the last several year we've used the word "unprecedented" a number of times. we had a pandemic a war in europe, shortage, bottlenecks.

high inflation there's no shortage of issues that we're facing. but through all that, our company has done extremely well by focussing on the consumer and focussing on the customer and doing our level best to keep our supply chain moving, keep food on the table, and that's why this transformation initiative is being announced from a position of strength, and we think it will improve our chances to continue the great momentum that we have, despite enormous challenges that we all face >> a lot of people own your stock for the dividends. it's safe now for this recessionary environment if queer' g we're going into that. >> you should think about the dividend in aggregate, and how we divide that up between the three companies, there's still work to be done. but those who value our dividends should have no worry at all they should continue to enjoy a great dividend from kellogg. >> got it, thank you for joining

us fresh off announcing that news joe, he said there's a chance that kellogg the name, a likely chance, will stay as the name of one of the three >> got to. then you've only got to come up with two >> but does it go to cereal? it's sort of synonymous with cereal >> yeah. >> snacks. >> the cereal is k-e-double l good >> i grew up eating frosted flakes and cinnamon toast crunch >> worst cereal still great, i think. you may need to add a little equal. >> that is something we can agree on thanks, joe. >> i don't floknow if the museu and take-out food make up for

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[ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. welcome back joining us now to try to make some sense of the market turmoil, tom farley, current chairman and ceo you have some, you have crypto, i know you're probably long some equities somewhere, whether it's spacs or otherwise sk >> saturday was my low point i got a message from my wife that her flight had been

canceled at l.a.x. after waiting 12 hours i filled the pump for 75 buck, and i made the mistake of checking crypto, and bitcoin had gone down, 17,500. >> you have a mini cooper? >> it all felt part of a piece and it felt like crypto was at a tipping point, then i spend sunday talking to distressed crypto ceos. >> a lot of them, huh? >> i've spoken to four over the last week. i think you're going to see recapitalization bitcoin is going to give the crypto market some time to revitalize it felt like a tipping point on saturday afternoon >> they had to shore it up >> some of these overlevered companies are going to raise capital or sell themselves, and

i think that will be a very healthy thing for the crypto market >> there are people that have, including matt damon, the future belongs to the brave there's a lot of stadiums named for crypto but i haven't seen much from novogratz. this earlier, bitcoin under 20 feels like an overrotation the underlying fundamentals have never been stronger, we saw the irrational top this feels irrational in the other direction. so has there been progress made in all those things that he cited there? infrastructure, adoption, regulation or is it all sort of an illusion you go back to 13,000 or below 10, you wonder what it was all about. it does look like a mania. >> i agree with everything but there's probabilities involved with it

>> are you a stacker >> i'm not a stacker i hollowed over the weekend, but it was hard. >> you held. >> i head. >> why didn't you step up at 17,5 >> i was with a very, very smart friend of mine on saturday afternoon, well-known in the industry and he made that exact comment at 17,6 and said this is the buying opportunity i think we will look back and say, wow, that was the bottom. if we had kept going on saturday afternoon, could you have seen real carnage in anybody who had leverage in crypto >> when you're at 40 and you make the decision not to sell and it gets to 17,5 and you don't have nerve to do it, that tells you. when you should be doing it, human nature make it is too difficult to do it i don't know if many people were stacking at 17,5

>> you have people saying the market has sold off. but it's been very orderly, vix, crypto has been anything but orderly. there was capitulation on saturday bitcoin has been running at 100% volatility for a week straight, whipping around. it's not for the faint of heart. >> and netflix, zoom, boeing, take your pick there are a lot of them that have not been orderly. it's just been regurgitating >> i think when the tide goes out you're going to see the people who were buying last week into this week -- >> thursday felt a little bit worse than most of the other days that we've had i don't floknow if it's real. but it felt worse. president biden could be meeting with big oil executives as early as their tis thursday o discuss what he calls high profit margins

joining us is dan everhart, the ceo of canary, one of the largest privately-owned oil field service companies in the united states. he recently wrote an op ed in forbes disagreeing with the president saying taxing energy production won't lower oil price. gas prices are incredibly high americans americans every. >> repowhere are feeling the pinch. >> to me these solutions the biden administration spuris purn don't really work. we either needless demand or more supply. what i'd like to see the administration do is focus on increasing supply. things like a national gas tax holiday, that's only going slightly increase demand it's not going to increase supply what we need are things that provide a tailwind to the

industry to make them want to produce more and want to refine more than ham fisted approach where they're trying to beat around the bush ask opec for more help and the national gas tax holidays don't make a lot sense to me. >> what would be the right move? what would incentivize companies to drill more or refine more >> first of all we've seen five refineries close in the past year about 5% of total u.s. demand. i was born in 1979 we haven't had a new refinery come on line since 1977 in the u.s. so this whole idea of there's kind of a green blanket over the long-term investment horizon, and that's a crunch on what people are willing to invest, and we're really seeing the chickens come home to roost right now and people aren't making these investments we've underinvested in the sector since covid, and the administration needs to figure

out how to create a tail wind for the industry we have the same supply chain disruption that other businesses do we're struggling to get enough casings, enough wellheads, enough sand to produce, to drill more and produce more. and i think the biden administration needs to go to the oil field and ask them what they need for help, not just kind of sit in d.c. and complain and, you know, have this ham-fisted approach which i feel they've been using >> president said that he would use defense production act in a letter that he sent to a lot of the major oil companies last week i got the sense that he wasn't going to use that to help them at least not from reading the letter but what you're talking about, making sure you could get the supplies you needed. whether that be the sand, the pipeline, whatever that might be, maybe that would be a useful thing that the administration could do if they used it in the right way. >> yeah. yeah, so the administration, you

know, look, things like ra raisg royalty permits, that's not going to help us increase supply i actually responded to the letter biden sent. but as did many other oil ceos if we need more oil refined products, the refinery complex some r some is operating at 100% capacity. as i said, the policies the administration has put out have caused five refineries to close in the last year that's about 5% of the had, you know, amount we could refine if those refineries were still open that would have potentially helped thus summer to reduce the prices, to move the prices down. we've also got a diesel shortage so refineries are going have to produce less gasoline for

consumers and more diesel. to get us out of that problem >> we're out of time right now, but we would love to have you back on to talk more about it. >> thanks for having me. coming up, cecilia rouse will join us to talk inflation, the state of the economy and much more. as we head to break, here's a quick check on the futures we were up over 500. we're still up over 400. a little bit of weakening in crypto stay tuned you're watching "squawk box. the new frontier. ♪♪ eh. ♪♪ it's not time to escape. it's time to engage. it's time to plant more trees. hoo! ♪♪ time to build more trust.

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good morning it is the first official day of si summer, and stock market futures are surging. president biden is thinking about pausing the national gas tax, and what it might mean for the demand front and a new twist in the spirit airlines saga jetblue upping its offer yet again as the final hour of "squawk box" begins right now.

good morning, and well comet "squawk box. i'm joe kernen, along with becky quick. andrew's off today, spending some time withn us in studio today, tom farley. >> showing some respect. >> we appreciate it. we have a big final hour of the show for you interviews with white house counsel cecilia rouse. dow futures hanging onto 400 we were 502 earlier. bitcoin was 21,5, 21,6 after getting as low as 17 and change over the weekend i don't know what part of crypto

winter we're in. i don't floknow if we're in jany or late march. >> trillion and a half of value destruction. it's going to hurt going to leave a mark. >> going to leave a mark one way to put it. there's ten-year, 3.292. relatively well behaved. partially responsible for the better tone for equities jafte hitting almost 3.4%. let's talk about this morning's premarket rally after a week of pain on wall street. mike santoli joins us. how are you feeling about the green erosarrows >> i think what i would characterize it as, we're bouncing where we really should, at least in the short term why is that down almost 11% in

two weeks. we've hit very rare extremes all that kind of thing means we should actually have relief. also last week we had a gauntlet to run with the fed meeting, ecb meeting and the big, big options last friday. this bounce doesn't look like a whole lot. captures the premarket stuff i would say you have to get up to 4,000 on the s&p, that's 400 on the spydr it's got to be broad, showing real money involved. get above some previous hurdles, maybe we call it around 4,000, and maybe event lipually after t you have a retest. take a look at stocks versus bonds. i've been pointing out the fact

that whuen you've been losing money, it reduce everybody's risk budget. this is an approximation of the stock, 40% bonds, that's aor you see stocks, the total stock market index had badly pormd but bonds have stopped going down the last couple weeks we're coming into month end. there are asset allocation funds. in theory, in the next couple days it should create a little more of a tailwind and say that the stock part of it has gone too far. you're underinvested in stocks if you have not rebalanced what do you do now is the question take a look at semi-conductors versus energy. this goes back to the peak in the market before the covid crash. february 19th of 2020, and you see it's basically now almost a dead heat, right was basically all growth, cyclical growth.

what's interesting here is energy declining along with semis in the rest of the market. energy's even a little oversold right now. you have that final stage of a decline, becky where there were really no places to safely hide. >> you were talking about stocks and bonds going down at the same time add to that a third leg of the stool, krip crypto crypto stabilizing might be part of why it's stabilizing too. >> even if it's not systemic, psychologically, you see the losses building up >> mike, thank you we'll see you a little later this morning in a new estimate, goldman sachs see as 30% of a u.s. recession in the next year, up from a previous forecast of 15%. analysts say a recession in the fourth quarter is more likely than not joining us to talk about the market implication of all this,

liz young. and it mentions total number economists that they poll at 44%, which they note is usually a number that you don't hit until you're either on the cusp of an imminent recession or already in a recession what do you think? >> that's right. recession risk has certainly risen, i can confidently say we're in a slowdown. at this point, it's definition of recession that we're all looking for. that's a lot of reason why i think this volatility can last throughout end of july, that's when we'll get the q2 recession number, or the q2 gdp number and find out whether we actually are in a recession, and the market reacts to that i think in the next week or so as mike just pointed out, we have rebalancing tailwinds, the end of second quarter tailwind that we might see a pop in the market after such a tough week last week, but i don't think that lasts, and it doesn't

change anything about the fact we're still in an economic slowdown we're still waiting for some of this economic data to catch up to what we've seen in th market >> mike wilson was on, morgan stanley, and said the multiple is already way down much more reasonable, but now we've got to worry about the e. there's going to be revision and his view was if we see a recession or a slowdown from buying with profit margins being hurt by inflation that we're dme not cheap. we could see 3,000 on the s&p if we do have a recession do you think we'd go that low snan we' and if we're. >> reporalready in a

recession. >> recessionary drawbacks are typically more than 30%. if you get down to that 3,000 level that mike is referencing, that's about a 37% drawdown from the highs. i think we can get down into the range of 3400 to 3500, which would get us closer and that serves as support for a while until we know we're in recession. but absolutely, down in the s&p in a recessionary environment, that's pretty normal and pretty mild for a recession that's certainly a possibility going into the end of the year >> do we ever bottom in the summer with all the flares s not necessarily around if this drags into another horrible october low,que we cou have a counter trend rally, but

seasonally, do you ever see bottoms in the summer? >> anything can happen anything's possible. what you're saying is without heavy volume usually we can't find the bottom. it's possible we find one in summer also remember midterms are coming up in fall. the market usual struggles ahead of a midterm election and bounce afterwards we may see a little bit of a bounce in october, november that takes us into positive territory the end of the year. i think the volatility is june and july and august we have a reprieve, whether that's chopping around in the same range i'm not sure but we probably have a reprieve going into august and early fall >> what are the leading indicators that you're looking at that tell you how bad things are? >> it's tough. when you look at the leading economic index, it's not really going to signal things coming six to 12 months down the road

the market is what signal the things coming six to 12 months down the road. the best leagding indicators ar sentiment. people are positioned extremely defensively. so i think the market has sent signals that things are not good, and they're not necessarily getting better anytime soon that's probably the best leading indicator. >> when you look at coincident indicators, that hasn't turned over enough. we need to see that turn over before we can expect to know what's coming ahead. >> very good, liz. thank you. happy tuesday. c keep reminding myself. coverage up, would a federal gas tax holiday bring meaningful relief cecilia rouse will weigh in next plus we're going to ask dan niles how far he thinks we are

from the market bottom but first, as we head to break, here's a few of this morning's top business headlines kellogg will split into three companies. the u.s. cereal business and plant-based foods. the kellogg ceo joined us last hour >> right now i think is the opportune time to do this. we coming from a position of real strength and great momentum we see the next step in unlock being our full potential in unleashing three new companies >> which means possibly changing names. m ma mondelez is already take jetblue increasing its offer to

spirit spirit plans to decide by the end of the month whether to stick to the deal and rge thmewi frontier or go with jetblue. stay tuned you're watching "squawk box" on cnbc

coming out after long holiday weekend, the national average for a gallon of regular gas actually dipped below $5 at $4.97. president biden is aiming to make a call late they r this wea potential gas tax holiday. savings could amount to 18 cents. it's great to have you on, chair rouse. >> good morning. >> you've had a long history with a lot of administrations. you remember president obama was not a fan of this move said it was a gimmick and i don't believe people need a free half-gallon of gas it's not going to solve what we're trying to do did you agree with him back then did you change your view senator

view, or is it different this time around? >> we're coming out of a pandemic there's a lot of uncertainty we have record inflation so this president, while very proud of the growth and in our economy last year and the strength of our labor market also very much understands the cost of frinflation for american families we know a lot of the inflation has been caused over the last several months by putin's invasion of ukraine because that has jen rated increases in our energy prices, so sprpresident biden is looking at all tools available to make it easier for people at the pump that's why he's done historic releases from the strategic petroleum reserve and is looking at other options on the table as well, including a gas tax holiday. >> i'm going, tom's going to come in here, and we short of the same idea. we're goosing demand but not

increasing supply. na that seems like -- >> that's exactly what i was going going to ask the biden administration has reduced supply increasing demand. what is that going to do to price in the long run? >> so oil production is actually up and there's been more oil produced in the president's first year in office nanthan inw years of trump he has signaled that he wants to work with them to help them increase production. he's encouraging them to use the 9,000 permits that they're not using. secretary granholm will be meeting with refiners tomorrow he is look to increase production in any way he can, which is why he welcomed the decision from opec plus to

increase oil production. yes, he needs to get oil on the market, he very much understands that, but he understands families are facial high prices at the pump and wants to give them more breathing roope. room we all know oil is priced on the global market. >> i must be living in the past. i'm going to go back to larry summers. i wonder if you could weigh in on whether you think the possibility or probability of a recess recession increasing and he certainly worried about a hard landing today in the w"wall street journal," 44% of economists are thinking we could have a recessio recession by the end of 2023 you're a trained economist i think you went about as far as you can go in the dismal science at harvard do you see signs that could

indicate that it was such or that it likely to occur? >> we all hope the fed can get inflation under control without ceding too much on employment what we had is one quarter of negative gdp growth, largely due to exports being weaker than imports. and some other weak indicators but if you look at the core parts of the gdp last quarter, they were actually rather strong in terms of consumer spending. if you look at the labor market, it remains strong. we continue to get record low unemployment claims. with the national looks back, it looks at consumer personal income we we know that balance sheets

remain healthy for now this is all due to the fact that last year we are record growth historic drop in unemployment, so that the bones of our economy are strong we are best positioned to go into these challenges than most other nations whchlt we looked at the issues, and we are concerned. but we're strong >> are too many dollars chasing too few goods. we know because the pandemic that both fiscal and monetary authorities really opened the spigot in terms of credibility, there's a lot of people pointing fingers, either at j. powell and the fed for using the t-word, the transitory word, and later saying we were dead wrong.

treasury secretary yelle nyelle was absolutely wrong >> i think fundamentally, the inflation we're going through now is related to the pandemic and the fact we shut down our economy, which, and we did that, we did that and globally that happened as well to varying degrees. it is not easy to turn back on a world economy. the fed did what they had to do to get people through that pandemic it's hard, looking through hindsight, that's monday morning quarterback backing. we knew we needed to support our economy. the fed wanted to support our financial market, which is why we lored back.

if you look at economic forecasting, it's been really wild we rees released a blog last ye. it's been really lhard to judge. i think it was kind of an insurance policy. >> there was no time when we heard that word used again and again. did you ever in your heart of hearts think this might be longer lasting as i said it someone in economics who gets into it so deeply. did you ever think i wish we weren't saying that? were you ever on board with the whole transitory nature? >> in my mind, the question of transitory was, and is that it was related to the pandemic as opposed to a kind of inflation in which we have anchored expectations, and we have really

entrenched inflation i still believe that a supply chain unsnarled as we get back to our regular economic activities that we will see inflation come down. in fact, if you look at core it has moderated. president putin's invasion of ukraine is the latest game changer here that vereally generating the increases. we have multiple challenges which are causing challenges >> mentioned that the labor market strong, but inflation has obliterated all the wage gains since the start of the pandemic. so americans are actually feeling poorer as the price of good goes up and wages go down it feels like now is the time to really focus on fighting inflation, but as recently as last week, the build back better bill was still on the table. is now the time for the

administration to be pushing sp spending millions more or focussing on inflation >> so the president is focussed on inflation and build back better is a long-run investment to increase economic capacity so we're better able to address inflation. parts of build back better include addressing costs like prescription drugs, making the transition to clean energy, which we know we need to be making as well that's not the kind of dollars in stimulus. it's investment, investments that we know pay for themselves over time. that's smart economic policy the president is trying to take the kinds of actions that would address gas prices in the more might term while making investments we know we need to make to steady, sustainable growth that will benefit all americans. >> is it possible, as americans are feeling that pain that that messagesa little tone-deaf cand

could have a negative impact >> i'm not sure which part is the tone-deaf. the president is looking to lower costs -- >> spending money. >> go ahead. >> he's focussed on reduce cost, prescription costs, child care, helping people get back to work because they are able to balance responsibilities at home and at work these are the kind of investments we need to make. they spend out over time we know this president is focussed on reducing the deficit. it is on track to be reduced by $1.7 trillion this year, more than happened under president trump. so he understands that the goal the deficit place also in reducing inflation, but we also need investments to make sure our economy continues to thrive as we get to the other side of this >> thank you >> thank you for your time this

morning. we appreciate it see you again soon >> you're very welcome and on the topic of oil and gas price, we have this programming note, the exclusive look inside exxonmobil the unprecedented access to workers and facilities the company is ready for the energy transition. exxonmobil at the crossroads premieres tomorrow at 8:00 p.m. right here on cnbc when we come back, the co-founder of tesla wants to recycl recycle thousands of ev batteries.

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remember all those toyota priuses from a decade ago or more they might be about to get a second life or at least their part parts may be let's bring in phil lebeau. >> let's bring in the ceo and founder of redwood materials which is announcing this morning that you guys are inking a deal or having to deal with toyota to recycle and repurpose ev batteries. and so many of these at least initially will be these prius batteries from ten, 15 years ago. how many of those batteries do you think are close to the end of their life and you will be

ultimately recycling and repurposing? >> good morning, phil. we're very excited to be jumping in to recycling those old hybrid electric batteries there were millions of prius and hybrids sold we are able to take the nickle and other valuable elements from those batteries and sort of make it into a new chemistry into something relevant for lithium ion batteries today. >> what you're talking about the components that you're going to be able to extract from these batteries if you're not repurposing the battery. it gets into the question of raw material prices. we've seen them spike for all of the ev battery components. how much higher do you expect them to go when you look at the market over the next six months to a year? >> i think in the six to 12-month time frame, commodity prices are certainly at high

levels, you know, if you look his to historically, nickel, lithium, cobalt, we're at all-time highs on these metals st i don't think we're going to see massive increases from here. you know, the value proposition interestingly for evs is stronger than ever when you compare the voided price of fuel and gasoline, even despite these higher materials price, you know, there's wait times for evs that are longer than they've ever been. >> jb, back in the day when were you starting tesla, you guys had some lean times, especially in the beginning. you know how hard it is to start up an electric vehicle company now we've seen some of these companies. im i'm talking about one that has filed for chapter seven

bankruptcy there are others that are struggling would you start an ev company at this point, given the challenges that are out there >> well, i do think people underestimate, you know, how difficult it is to really ramp a high volume manufacturing company. and, you know, certainly, an ev company, any automotive company needs to rely on an efficient production line, efficient supply chain these are really difficult things to do and do well right now. so i think we will see some more pain amongst the field of startups but in pmy mind, there's no question that the ev movement is beyond the point of no return. the large oems are accelerating in this direction that will make it harder for new startup entrants if it was me, i would think pretty hard about starting a new ev company right now and what can be add relative to what's happening with other oems and

tesla. >> jb, one last thing on the ev prices that we're seeing the average one is close to $60,000 if not over $60,000 right now. do they come down anytime soon given the cost of batteries? >> i think we will definitely see ev prices continue to come down we're in a supply-constrained market right now for evs people have to wait exorbitant teams. and, you know, it's sort of not a sort of open and level market. battery prices, you know, despite commodities are continuing to decline. and we do see other companies like toyota in our recent work with toyota where toyota is very focussed on low-cost evs, and i think using, you know, higher combination of recycled materials and lower-cost tears c materials can help make that

possible >> have they announced a deal with toyota. thank you, jb. a busy, busy day in the world of evs. >> not a great weekend of travel we didn't talk about that. >> no, we didn't talk about that >> i'm sure we will this week. >> thanks. coming up, we talk with dan niles, and he tells us why he's positive on the month of june as the s&p 500 tanks. i don't know whether he likes the weather or the stocks, not sure you're watching "squawk box" on cnbc a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.

welcome back to squaufx on cnbc the dow up the s&p aforementioned s&p coming off its worst week since the pandemic panic of early 2020. meanwhile, the dow down 11 of the past 12 weeks in the entire h history of the index, that has never happened before. >> records that you like to see?

>> yeah. >> setting new records >> says it's never happened. >> before theis on february 1st with the nasdaq down 9% on the year, our next guest says it's way too early to say this is the bottom. >> i think stwha too early to say is this the bottom we came into the year december 28 saying we expect a 20% selloff in the s&p 500 from peak to trough when all's said and done in that environment, tech gets hit the hardest, because they have the highest multiples >> how right he was. back with us now is dan niles. the founder and senior portfolio manager of satori funds. and we have seen an awful lot of pain unfortunately, you don't think that we've seen the bottom yet why is that? >> well, i think you have two things you have to focus on.

the first is you don't want to fight the fed. and the fed is going to have to be the most aggressive since the 1970s to get inflation down. you don't want to fight fundamental. you had target come out three weeks after they gave guidance, microsoft, six weeks after they gave out guidance. intel, six weeks after they gave guidance so i think you're going to see q2 earnings be absolutely horrible in terms of the guidance that they're going to give for q3 because you're dealing with slow growth at the same time you're dealing with high inflation affecting their businesses and pe multiples in a high inflation environment contract really sharply, and that's yes th why i think we're still going to be down next year when we're

sitting in a recession >> margins have already compressed a lot how low do they go if you're looking at the tech csector, th s&p 500 overall. >> unfortunately, these things go to the upside unfortunately, they also go lower than you ever thought possible don't forget part of the reasons companies are preannounce, microsoft talked about it being due to currency. you had target come out and say it was because of bloated inventories and switching consumer demand from goods to services and then with intel, demand slowing down in pcs and the mac. you have multiple things going on right now the only positive really, one of the sectors we like in tech chinese tech, specific clinternt

the k-web, which is an internet etf for china is up 7% remember where they came from. k-web is down 7% nasdaq's only down 33% the problems in china are self-inflicted they're shutting down cities, and they had excessive regulation a lot of those thing are pulling back right now so their business actually might be improving and have seen the bottom, whereas for us we expect a short-term rally because things are oversold on a technical matrix it looks like we're going to get one their mis morning >> economy's going to get much worse, but the leading indicators like real estate are down 40% to 80% already. is it possible we could form a bottom either here or shortly,

not withstanding a bottom in the markets, not withstanding further economic deterioration >> yeah, the one piece we haven't talked about is multiples. if you look at the s&p multiple, when you have cpi above 5% of the and obviously, it's above 8% right now. the multiple 12 times. right now it's at 18.4 times to get to that multiple the market would need to go down another 30-plus percent. during that period, you got market multiples at 15 times. they tend to overshoot on the down side. i think it's really hard, especially sitting in front of a horrible earning season, target

went don't most in a day since black monday, 1987 walmart, the most since 1987 black monday you aren't seeing people say oh, this is the bottom and i have to buy. the fed is your enemy you could argue for the first time in 40 year and not your friend because they can't step in to stop the carnage, because they have to deal with inflation first. >> this all makes sense, but everybody we've spoken today today has been pessimistic one said there's a 50-50 chance that we end up 30% lower when you have everybody convinced that stocks have to go a lot lower, sometimes there's counter intuitiveness that comes into this. is there a chance for a bounce for a while? or you think even if we do it's not going to be something that lasts? >> yeah, we think there's a

bounce coming. fu if you look at our 2013twittert on friday, we're positioned for the next baear market rally you take the tech bubble, the s&p went down 50%. but you have five separate rallies in the s&p 500 of 18-21%, while losing half your money from peak to trough. so could you have a vicious bear market rally yes, because you've seen that before in some of the worst bear markets that we've ever seen so for us, it doesn't really matter we're positioned for a big bounce but much like you've seen with our posts, our feeling is you run it up just like you always do because people think oh, it's all discounted, and they're down so much after they go down more. but there's a time kpoen tonight

t to this which people are forgetting recessions are last a year and a half too two year. the market paeeaked? january? you can aprply a multiple that makes sense. in the end i don't care if it's the bottom or a fair market bottom we've covered most of our shorts at fundamental data plays out then we figure out, okay, do we go short again or is up 1010%, are we going to continue china forgets about locking down their cities and the fundamental data starts to improve >> you said you're very long you like other things besides chinese stocks what else? >> yeah, for us the way we get

long is we cover a lot of our shorts so you have to remember at one point we were, i know we said this on air, we short over 20% right now if you subtract the percentage of our portfolio that's long minus the percentage of our portfolio that's short, we're up over 50% long which for us sepis pretty aggressive beyond just chinese tech, what we lhappen to own a lot of the reopening names, hotels, airbnb, hyatt, things that, services that people are switching to, uber, as the economy switches from goods which you bought during the pandemic because you had nothing else to do to services wh services when we all get out and travel so we're focussed on those areas as a big one for another, china tech.

and some of the internet names like the facebook disaster, we bought it back quite a bit lower and go, you know what, maybe at 14 typ 14 times, this is an area where it makes sense with the s&p quite a bit higher than that in the high teens that's how we're kind of playing things right now >> dan, thank you. always good to see you >> thank you, becky. >> when we come back, jim cramer's take on a shortened week "squawk box" will be right back. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi.

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some breaking news doccusign ceo dan springer has agreed to step aside for what the company is calling the next phase of growth. that's something shareholders arably looking for at this point. effective immediately the chair maggie wildserrotter has been appointed ceo pending a search she will remain share of the board and maggie, we know her well from her time at frontier, she's been with us as a guest host on the show many times, the stock off 1.5%, dbut down 60% year to date the company is calling this the next phase of growth. >> 314 is the high. >> down 80% since the high >> since the high. >> dan has been the ceo, took it public four or five years ago, in the 400, 300, back to the

60s, quite a ride. >> let's get down to the new york stock exchange. jim cramer joins us for more jim, just about everybody we've spoken with this morning has been pretty pessimistic, despite the fact that you have the futures up about 425 points right now. how are you feeling about things >> well, i'm further along in terms of where we are. i mean i know dan said -- i love dan -- these things take two year, but the actual bear market average is about 180 days. and we're at about 190 it's very hard to be as negative as everybody else. as tom just said, destruction is unbelievable yet, no one talks about the destruction. they want to, you know, say s&p goes to 3,000. have they seen what's going on dan springer is a pretty good ceo and he's been on a bunch of times. i would argue that that business peaked during the pandemic because you couldn't have people get together what was he supposed to do, come up with a different company? merge with zoom? i mean, i don't think -- i look at these things and say natural

evolution. but becky, i think that the destruction matters. i know we shouldn't be thinking where stocks come from, but there's been so much market loss that i'm just not going to sit here and say it's got another 25%. because that just doesn't make sense to me. >> it probably depends on where you're looking, especially if you're looking at p/e ratios on some of these things that have come down so drastically i guess is it fair to make comparisons to pre-pandemic for some of the p/e ratios >> i think so. look, i mean, people disagree with the forward multiple. i think it's 15, 16. again, i mean i come back with, if you had a real big break in oil, something happen in china or something happening in russia, then i think what you would say is wow, why did i not buy it i can't believe how these stocks have fallen so much. if china opens up, what do you pay for apple, 160, 170. you have to be prepared for upside break because the

downside is so palpable. i thought it was interesting, mike wilson is now bullish pretty funny. >> i've been going -- i've been worrying about just trying to sound too positive, but i don't know the feeling, let's say we get another negative print on gdp, so that's trow, so the fed says hey, this is already done what if things happen quicker than we thought? you saw the journal piece, 44% of economists are forecasting recession. that happens during a recession or on the cusp of a recession. everything could be happening much quicker it bothers me the vix is not cooperating. do we need a 40 vix, the final flush? >> we need to see all the price targets come down to be more realistic levels and that hasn't happened and we need to see -- i listen to dan say we have 18 to 20% rallies in a bear. i come back to the idea that we've been crushed the spacs have been crushed.

all the ipos, many running out of money a lot of good companies like kellogg saying we can't take it anymore. that's not -- that's not top talk that's bottom talk. >> right from your lips >> good to seeouji >> good to see you, tom. >> we'll see you in a few minutes. "squawk box" will be right back. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world. so, i'm a beach side hotel. as you can see, i'm pretty relaxed. i'm looking for someone who likes sand and sun. if you have kids, i'm great with kids. so yeah, that's me. ♪ ♪

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news just out this hour, blockfy's ceo tweeted the company signed a term sheet securing $250 million revolving credit facility from f that provides them with access to capital, to bolster its balance sheet and platform strength and the agreement unlocks the future collaboration with ftx not a lot of time left, tom. is this the kind of stuff with a crypto story that happens when you got another 50% down to go or they're already scrambling? is that closer >> i think saturday was the capitulation >> you do? >> all weekend ceos were having conversations about recapitalizing the over levered businesses

the spike going up 20% is a bit of a spike to get it figured out. >> they're never going to over lever again. >> risk management is difficult and learned by experience. >> but a lot of leverage you don't have to be real smart to know that's a bad idea. >> yeah. when bitcoin was at 69,000, i don't think people were imagined it would rip to 17,000 in a couple months. >> being, you know, around stocks and markets for so long, we're all waiting for that flush, waiting for the capitulation could it make a bottom without that it feels horrible, felt horrible last thursday. >> look -- >> is that enough? >> it hasn't been unruly trading or 50 to 70 vix, but it's been painful. the s&p is down -- >> doccusign, 314 to 60. >> that's one of hundreds. >> yeah. >> so i'm hopeful. i'm hopeful we'll make a bottom at some point here in the next several weeks. but -- >> any bottom we make is going to look like a counter trend

rally heading into a final low in october, at least we're going to hear a lot of people say that >> yeah. >> tom, thank you. >> it was great to be here with you guys. >> good to have you in with us this morning we'll get a final check on the markets. still up, bitcoin over 21,000. we're not at 500 we're up about 400. we'll -- some of us will be here tomorrow. make sure you join us. "squawk on the street" is next. i'm not. good tuesday morning welcome to "squawk on the street." i'm david faber with jim cramer. carl has the morning off let's give you a look at futures as we get ready to start trading, first trading day of the week it's tuesday got to keep remembering that tuesday. here's our road map. it does start with the probability of a recession. goldman sachs is raising the odds of one. one big question, have stocks already priced that in prices at th